Commerce Commission announces TSO costs for 'unprofitable customers'

18 Nov 2010

The Commerce Commission has issued a draft calculation of the proportion of the cost payable by phone companies to service unprofitable telecommunications customers for the year ended 30 June 2010. Under the Telecommunications Service Obligation (TSO) – the successor to the Kiwi Share programme – Telecom is obliged to provide local telephone services to certain residential customers who may not otherwise be provided with those services at an affordable price. The Commerce Commission determines the net cost to Telecom, and how the remainder is split between the country’s remaining telcos. In this week’s draft determination, Telecom is liable for 66.6% of the as yet undecided cost, whilst the commission proposed that 25.2% of the cost should fall on Vodafone, 6.3% on TelstraClear, 0.8% on 2degrees, and the rest on nine smaller telcos. Submissions regarding the draft close on 30 November. The Commission added that it will not begin calculating the fee applicable to the TSO until the outcome of court action relating to previous years’ TSO obligations has been settled.